FATF guidance on returning stolen crypto assets: what will change

The Financial Action Task Force (FATF) has released new guidance that revises its approach to tracking and returning stolen cryptocurrency assets. GetBlock AML Research publishes the main points from the guidance and explains how regulators will now proceed with the return of stolen funds.

The return of stolen money must begin immediately

Today, the return of money obtained by criminal means is not a “matter for later.” In cases involving cryptocurrency, the search for and freezing of funds must be carried out in parallel with the investigation and from the very beginning. If you delay, the money will simply disappear.

Speed is key, not jurisdiction and formalities

Cryptocurrency moves very quickly. Money can be transferred to other countries and other platforms in a matter of minutes. Any delays, due to bureaucracy, unclear rules, or poor information exchange, significantly reduce the chances of recovering funds.

Cooperation between the state and business is a necessity, not a choice

Law enforcement agencies alone cannot keep up with the movement of digital money. In order to block funds in time, constant and rapid coordination with crypto exchanges, fintech companies, and other market participants is necessary.

It is important not only to punish the guilty, but also to recover the money

Effectiveness is now measured not by the number of criminal cases, but by real results: how much money has been frozen, how many losses have been prevented, how much money has been recovered, and how much the financial capabilities of criminal groups have been weakened. Money recovery is a goal in itself, not a side effect of the investigation.

Global standard — real-time money interception

The main difference between the new FATF recommendations is their focus on the specific nature of digital assets. Cryptocurrency moves quickly, easily crosses borders, can be transferred between wallets multiple times, and the window of opportunity for its interception is very small.

The importance of joint action by the state and private companies is emphasized separately. Examples are given of models where such actions make it possible to stop losses while the money is still “in motion.”

If you read the recommendations from a practical point of view, it becomes clear that they describe the entire workflow of modern cryptocurrency cases — from early detection to rapid decision-making, coordination between agencies, and operational interaction with the private sector.

What they want to change: money should be returned immediately, not “afterwards.”

The key idea is that the return of assets cannot be postponed until the case has been assembled and is ready for trial. The financial part must run parallel to the investigation from the very beginning.

The goal is not simply to prove guilt, but to:

• prevent criminals from keeping the money;
• reduce future damage;
• deprive criminal networks of financial resources.

Money recovery is seen as a whole system, not a single action. It is important that there are no “weak spots” at all stages — from freezing to storage and subsequent sale of assets. If the system breaks down somewhere, the result may be lost completely.

For example:

• it is possible to track money well, but lose it due to poor storage;
• it is possible to have the right to seize assets, but not know how to manage them;
• it is possible to be ready to act, but not have quick access to data.

Laws and structure: tools must work in practice

The recommendations insist that laws must be clear and applicable in practice. Investigators and prosecutors must have clear powers to:

• locate assets;
• freeze them quickly (including in emergencies);
• seize and confiscate funds.

The structure of the authorities themselves is also important. Specialized teams, a clear distribution of roles, and procedures that do not slow down the process are needed. Returning money is not the task of a single department, but a joint effort between investigators, prosecutors, financial authorities, and regulators.

A financial investigation must answer two questions simultaneously:

• What happened?
• Where did the money go?

Financial investigations: data and technology are key

Success depends directly on quick access to information. The main problems are:

• data is scattered across different organizations;
• access to it takes a long time;
• formats are inconvenient for analysis.

Solutions include consolidated databases, simplified access procedures, and standards that speed up work. The so-called “financial profile” stands out: understanding what assets a person or group has, who they are connected to, and how they usually move money. This helps to see in advance where and when funds can be blocked.

Technology here is not a buzzword, but a necessity. In modern cases, the volume of information is too large for manual analysis. The importance of visual diagrams and charts that help quickly explain complex financial chains to prosecutors and judges is also emphasized.

Not theory, but real practice

The section on virtual assets is written as if it were compiled by practitioners. The main idea is that cryptocurrency dramatically accelerates everything that happens. Money can disappear in minutes, across different countries, platforms, and services, making it difficult to track.

Therefore, there are three key tasks

1. Quickly recognize cryptocurrency on the spot

During a search, it is important to immediately understand that there is access to digital assets: recovery phrases, hardware wallets, wallet files, QR codes, and exchange applications. In such cases, even a delay of a few minutes can cost all the money.

2. Clear seizure procedures

Many laws were written without taking into account remote access and instant transfers. If employees do not understand what to do and in what order, assets may be lost. The solution is pre-written procedures, training not only for specialists, and standard protocols for action.

3. Main methods of cryptocurrency seizure

In practice, three options are used:

• obtaining private keys by legal means;
• seizure of funds from exchange accounts;
• freezing of funds in cooperation with stablecoin issuers.

In all cases, speed and coordination remain the decisive factors. If the money has left the accessible control points, it becomes much more difficult to recover it.